Philippine Shipping Update – Manning Industry

By:  Ruben Del Rosario, President, Del Rosario Pandiphil Inc., 1 June 2018 (Issue 2018/07)
 
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Supreme Court upholds grade “11” disability assessment of the company-designated doctor as basis for the award of disability benefits

 The crew was engaged as Head Wine Waiter.  During employment, the crew suffered a back injury after lifting a box of wine and falling on the steel pavement as the vessel rolled.  The crew felt a sharp snap on his lower back accompanied by extreme pain radiating down to his lower extremities for which reason he was referred to the ship doctor.  Eventually, the crew was repatriated and was placed under the care of the company-designated physician.  He was diagnosed with Lumbar Spondylosis, Disc Protrusion, and Disc Bulges.  The crew underwent extensive physical therapy and after about three months, was assessed with a grade “11” disability.
 
The crew then sought consult with his personal doctor who assessed him to be permanently unfit for further sea duties because of his condition.  On this basis, he filed a claim for disability benefits before the Labor Arbiter.
 
Both the Labor Arbiter and the NLRC awarded full disability benefits of US$60,000 to the seafarer.  They reasoned that the assessment of the company-designated physician is based on a purely medical schedule that does not consider the loss of earning capacity. The fact that the crew can no longer be employed as a seaman is essentially a total and permanent disability since the principle is that disability is measured by the loss of earning capacity and not on its medical significance.
 
Upon petition, the Court of Appeals modified the decision of the NLRC and reduced the award to US$7,465 which is the equivalent of a grade “11” disability.
 
When the case reached the Supreme Court, the award based on the grade “11” assessment of the company-designated doctor was sustained.
 
Claimant did not follow the third doctor procedure
 
The Court noted that the rulings of the labor authorities (Labor Arbiter and NLRC) are seriously flawed because they were rendered in total disregard of the POEA-SEC provision, which are deemed written in the contract of employment, on the prescribed procedure in the resolution of conflicting disability assessments of the company-designated physician and the seafarer's doctor.
 
Under Section 20(A)(3) of the 2010 POEA-SEC, if a doctor appointed by the seafarer disagrees with the assessment of the company-designated doctor, a third doctor may be agreed jointly between the employer and the seafarer. The third doctor’s decision shall be final and binding on both parties. The provision refers to the declaration of fitness to work or the degree of disability.  It presupposes that the company-designated physician came up with a valid, final and definite assessment as to the seafarer's fitness or unfitness to work before the expiration of the 120-day or 240-day period.  The company can insist on its disability rating even against a contrary opinion by another doctor, unless the seafarer signifies his intent to submit the disputed assessment to a third physician. The duty to secure the opinion of a third doctor belongs to the employee asking for disability benefits. He must actively or expressly request for it.
 
Here, the crew neither questioned such diagnosis in accordance with the procedure set forth under the POEA-SEC nor contested the company-designated doctor's competence. To reiterate what has already been settled, the referral to a third physician is mandatory and non-compliance with the procedure may militate against the claim for permanent total disability in cases where the company-designated doctor declared otherwise. This is especially so if the seafarer failed to explain why recourse to the said remedy was not made.
 
The crew’s filing of the claim before the Labor Arbiter was premature in view of the fact that he did not observe the relevant provisions of the POEA-SEC after he received a definitive disability assessment from the company-designated physician.  Failure to follow the procedure is fatal and renders conclusive the disability rating issued by the company-designated doctor.
 
The findings of the company-designated physician is more credible
 
The Court held that reliance on the assessment of the company-designated physician was justified not only by the law governing the parties under the contract, but by the time and resources spent as well as the effort exerted by the company-designated doctor in the examination and treatment of the crew petitioner while still on board and as soon as he was repatriated.
 
Based on the medical report of the crew’s personal doctor, it appears that only a single physical examination was done.  Said doctor did not conduct any diagnostic tests or procedures to support his assessment of a permanent total disability. This is opposed to the lengthy treatment conducted by the company-designated physician which is backed by laboratory examination and several consultations. Certainly, the assessment of the company-designated physician is entitled to great weight and respect considering that it is more reliable. With his consistent treatment and monitoring of the crew for several months, he had acquired detailed knowledge and familiarity as to the latter's health condition. The upholding of the findings of company-designated physicians is not due to their infallibility but rather, it is assumed that they have closely monitored and actually treated the seafarer and, therefore, are in a better position to form an accurate diagnosis and evaluation of the seafarers' degree of disability.
 
Disability grading upheld
 
The Court upheld the grade “11” disability assessment of the company-designated doctor as basis for the award.  The Court said that in a previous decision, they have already called attention to a compensation system provided by the POEA-SEC which is often ignored or overlooked in maritime compensation cases. This system is found in Section 32 of the POEA¬SEC which provides for a schedule of disability compensation, in conjunction with Section 20. To our mind, the reason why this compensation system is often ignored or disregarded is the fixation on the 120-day role and the notion that an "unfit-to-work" or "inability-to-work" assessment should be awarded permanent total disability compensation even when the seafarer is given a disability grading in accordance with Section 32 of the POEA-SEC.  A NOTE in Section 32 of the POEA¬SEC declares that "any item in the schedule classified under Grade 1 shall be considered or shall constitute total and permanent disability." Any other grading, therefore, constitutes only as temporary total disability.
 
Considering that the POEA-SEC embodies the terms and conditions governing the employment of Filipino seafarers onboard ocean-going vessels, it is about time that the schedule of disability compensation under Section 32 is seriously observed.
 
G. H. vs. Magsaysay Maritime Corp., Saffron Maritime Limited et al., G.R. No.226103, January 24, 2018, Second Division, Associate Justice Diosdado Peralta, ponente. (Attys. Herbert Tria and Pedrito Faytaren, Jr. of Del Rosario & Del Rosario handled for vessels interests).
 
GDPR Compliance Notice
 
The handling of seafarer’s claims involves the handling of personal sensitive data subject to the Philippines’ Data Privacy Act as well as the European Union’s General Data Protection Regulations (GDPR) which came into force on 25 May 2018.  The mismanagement/breach of said sensitive data will result into stiff penalties and fines
 
In line with the GDPR, as well as the directive of the International Group of P&I Clubs, Del Rosario Law and Del Rosario Pandiphil will now be implementing a change in their email subject line which would anonymize the data subject.  As such, the subject line of our emails would now only reflect the name of the vessel, incident date, position of the seaman and reference numbers of the recipients (if any) and the sender’s reference number.
 
We would suggest that in all emails to be sent, other identifiers for individuals be used instead of names to protect the privacy of the data subject.  The purpose of this is to ensure that only those directly handling the claim would be able to identify the individual who is the subject matter of the claim.
 
For ease of transaction, we strongly urge everyone to formulate policies that will further protect the privacy of the data subject but at the same time enable them to identify the subject matter of the email such as the use of reference numbers.
 
The Clubs have likewise provided guidance on best practices for the treatment of personal data which you may find helpful:
 
1. Respect - Treat everyone’s personal data with the same respect you would wish for your own.
 
2. Minimize the generation of personal data by email and on paper – The less personal data being created and circulated, the easier it is to protect. Only send information which is necessary for the handling of the claim.
 
3. Cybersecurity – Ensure computer systems are secure and make use of security measures such as password protection and secure email servers when transferring attachments containing passports, medical reports, contracts of employment etc. Encryption or secure web portals should be used when appropriate to protect sensitive information.
 
4. Anonymization – Aim to use identifiers for individuals, like crewmember, broker, surveyor etc. instead of names and dates of birth. Other identifiers could be the vessel name, the nature of the incident, or the port of disembarkation, with a reference number. This applies not just to the subject heading and body of an e-mail but also, where possible, to any documents which support the claim. If there is no alternative to using a name, it is recommended that it is cited with as few other identifiers as possible. It is also intended to adopt this approach for claim descriptions. If these steps are put into practice, it is hoped that, except for those directly handling the claim, it will not be possible to identify the individual who is the subject matter of the claim.
 
5. Start afresh - If you cannot avoid identifying an individual, do so once and then start a new email so that the same personal data is not repeated in the email chain.
 
6. Reply all? - Before using “reply all”, check that it is appropriate that everyone in the circulation list should actually receive the e-mail you are about to send.
 
7. Use official email addresses – Do not use unofficial, private, or any other non-secure email accounts.
 
8. Clear and lock - Keep your desk clear and your computer screen locked when you are away from your desk. Dispose of hard copy data in a secure manner.
 
9. Familiarize yourself with GDPR, including how it applies to your business and the penalties for non-compliance.
 
10. Communicate these guidelines to everyone in your organization.
 
Implementing the above security measures minimizes the risks arising from handling personal data.
 
Firm News
 
Del Rosario & Del Rosario Law Office Partners Charles Dela Cruz and Denise Cabanos together with Managing Associate Ma Gina Guinto-Ambil visited several P&I Clubs, Ship Owners and Ship Managers in Greece and Cyprus from 16 to 28 April 2018.

Aside from several meetings with indusrty partners, they conducted seminars and discussions on the latest legal updates regarding crew claims and procedures in the Philippines.

We would like to extend our sincerest thanks to all our partners in Greece and Cyprus who provided us with a warm reception during the visit. Our discussions proved invaluable and we hope to see all of you again soon.



2017 AsiaLaw Profiles:  Outstanding in Shipping, Maritime & Aviation; Recommended in Dispute Resolution  & Litigation, Insurance, Intellectual Property, Labour & Employment
 
“Del Rosario & Del Rosario is more or less unrivalled when it comes to maritime work in the Philippines” from Asia-Pacific, The Legal 500, 2014, p. 497
 
“Del Rosario & Del Rosario is often first port of call for employment law within the maritime industry, where it represents shipowners, agents, insurers and port owners.” Asia-Pacific, The Legal 500, 2014, p. 494
 
“Offers comprehensive shipping expertise. Maintains an excellent reputation for representing P&I firms and handling collision and crew casualties.  A strong team that is well known in the market.” Chambers Asia Pacific, 2014 p. 949
 

This publication aims to provide commentary on issues affecting the manning industry, analysis of recent cases and updates on legislation.  It is meant to be brief and is not intended to be legal advice.  To subscribe or for further information, please email This e-mail address is being protected from spambots. You need JavaScript enabled to view it. .